What Types Of Accounts Are FDIC Insured? Are My Investments Safe?

What accounts are FDIC-insured? Which aren’t? Now that a fund that markets itself as the world’s “first and longest running money fund,” suddenly found itself in the nearly unprecedented position of having to “break the buck,” we thought we’d help clarify. Here we go:

These types of accounts are generally FDIC insured:

Checking, savings, trust, certificates of deposit (CDs), IRA retirement accounts, and money market deposit accounts.

A money market deposit account earns interest at a rate set by the bank and usually limits the customer to a certain number of transactions within a stated time period. Do not confuse a money market mutual fund with an FDIC-insured money market deposit account, which earns interest in an amount determined by, and paid by, the financial institution where your funds are deposited.

These investments are not FDIC insured:

Mutual funds, annuities, life insurance policies, stocks and bonds.

What type of insurance covers my investments?

Your investments (mutual funds, stocks, etc.) are not insured against market risk — their value may go up or down depending on the market. You are, however, likely insured against the failure of your broker, or a bank’s brokerage subsidiary, by the Securities Investors Protection Corporation. This institution will replace securities that you own that go missing in accounts held by its members up to $500,000, including up to $100,000 in cash, if a member brokerage or bank brokerage subsidiary fails.

If you’d like more information, check out the FDIC’s website.

Insured or Not Insured?